ATHENS Greek banks are ready to open their branches across the country on Monday after a three-week shutdown, officials said, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.

The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.

Greek Prime Minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up bank credit lines but prompting a rebellion in his leftist Syriza party.

"Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality," the head of Greece's banking association Louka Katseli told Skai television.

Greeks will be able to withdraw 420 euros a week at once instead of just 60 euros a day, but the limit will effectively remain the same and capital controls will also stay in place.

"That's not a normal life so we have to negotiate quickly," Merkel said in extracts from an interview with German public broadcaster ARD.

Merkel said it would be possible to talk about changing the maturities of Greece's debt or reducing the interest Athens has to pay after the first successful review of the new bailout package to be negotiated.

Berlin, the biggest contributor to eurozone bailouts, would do all it could to bring talks to a successful conclusion but would "negotiate hard" to ensure Athens stuck to agreements, she said.

"That certainly won't be easy because there are things that we have discussed with all of the Greek governments since 2010 that have never been done but that have been done in other countries like Portugal and Ireland," she said.

ELECTIONS

Acceptance of the bailout terms that meant the banks could reopen marked a turnaround for Tsipras after months of difficult talks and a referendum that rejected a less stringent deal proposed by the lenders.

He sacked party rebels in a government reshuffle on Friday and is seeking a swift start to talks on the bailout accord with European partners and the IMF before elections which Interior Minister Nikos Voutsis said were likely in September or October.

But while opinion polls suggest the prime minister's popularity remains high, on the streets of Athens some were sceptical that the bank reopening would change much in a recession-hit country with over 25 percent unemployment rate.

"The banks opening tomorrow won't change anything for me," said 31-year old hotel worker Joanna Arvanitaki. "I never used to withdraw 60 euros a day - 60 euros is what I had a week for my expenditure."

Greeks will be able to deposit, although not cash, cheques, pay bills as well as have access to safety deposit boxes and withdraw money without an ATM card.

Deposit boxes are not affected by the capital restrictions and clients can therefore take whatever they want from them, bank officials said.

"We are expecting queues in our branches in the first two or three days. Many people will ask to open their safe deposit boxes," an official at EFG Eurobank (EURBr.AT), the country's third-largest bank by assets, said.

GERMAN SCEPTICISM

EU officials hope the bailout deal will be in place by mid-August when Greece needs to make new payments to the European Central Bank to redeem its maturing debt. A 7.16 billion euro bridge financing is enough to see Athens through July - including a July 20 ECB repayment - but not through August.

German Economy Minister Sigmar Gabriel said this deal could succeed where previous ones failed because the European Union now emphasises growth and investment rather than just austerity.

It would depend on reforms being enacted and "convincing the population that this is a path that allows Greece to assert itself rather than becoming a permanent alms-receiver," he said in extracts from a television interview.

French President Francois Hollande, who pushed hard for a deal, said the Greek crisis had weakened Europeans' faith in the European project.

"What threatens us is not an excess of Europe but its insufficiency," he wrote in an op-ed in the Journal du Dimanche newspaper, reiterating calls for the creation of a euro zone government.

But in a sign of the challenge for euro zone leaders to convince their electorates of the merits of the deal, more than half of Germans think the planned deal with Greece is bad and many would have preferred it left the euro zone, a YouGov survey seen by German newspaper Welt am Sonntag showed.

European Commission Vice President Valdis Dombrovskis called on the Greek parliament to pass laws on reforms "very quickly," in an interview due to be published in German newspaper Bild on Monday. He said negotiations on a third bailout for Greece would take several weeks, according to comments released ahead of publication.

Dombrovskis defended the decision to grant Greece bridge financing even though the Greek parliament had not yet passed its whole reform program, saying that the funds were important to prevent the country from sliding into insolvency and had only been granted once the Greek parliament had passed some reforms‎.

But he warned that the EU would "in the worst case scenario" hold off paying funds to Greece from the EU budget if Greece broke agreements and did not pay back the emergency loan. He said a Greek exit from the euro zone "is not on our agenda," but Athens needed to stick to its agreements and carry out reforms in return for solidarity.

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